25 countries… and counting — Exporter Magazine
Tracing the history of Neudorf Vineyards, its journey to overseas markets, and some of the lessons learnt along the way.In 1978 two adventurous spirits decided to opt out of the mainstream and be amongst the first to produce a world-class wine in a country known for its sheep, beef and pinus radiata. Tim and Judy Finn had enjoyed successful careers; Tim in the area of animal behaviour and Judy at the iconic National Radio. “I was lucky enough to be selected for a management training course,” Judy recalls. “After a day of double entry general ledger training I knew it wasn’t the future for me.” It didn’t take much for the two to agree on a future in the Moutere Hills at the top of the South Island, producing Neudorf wine.“We started with the end in mind, to create beautiful world-class wine,” says Tim. However, it was intended for the local market, and with queues of people lining up to taste premium New Zealand wine, exporting wasn’t even a consideration. Ten years on, the Finns were approached by an English distributor seeking a quality selection of the unknown New Zealand tipple for the UK market. Their export journey began. Although this first partnership did not last, one has to admire the courage of the distributor at the time as the suggestion of wine from New Zealand was merely considered good humour in the motherland. Today Neudorf wine is being poured at some of the finest restaurants in more than 25 countries, from ‘baby markets’ such as Malaysia, where product is provided to the exclusive Datai resort on Langkawi Island, to the Michelin-starred Alain Ducasse at the Dorchester in London. More than 50 percent of production now heads offshore.While the UK is still a major market for Neudorf, Australia has grown rapidly to become the largest and most lucrative. As well as being the easiest market to service, Australia has the added attraction of a 29 percent WET tax which is returned to the producer. In effect it is an extra sales margin; the tax was originally designed for supporting and protecting smaller Australian vineyards. However, under CER, New Zealand producers also qualify for the tax rebate.One market that excites Tim and Judy immensely is Sweden. Through its government-owned monopoly Systembolaget, Neudorf has one very reliable partner. “You just know the orders will come through as scheduled and payment is not a concern at all. With no local production and a wealthy sophisticated population, it’s a very attractive market for us,” says Judy.When considering China, there appear to be some good reasons why the sales cycle might be a long one. Tim explains: “Right now the volumes we are selling into China are to places where the product is probably being consumed by European tourists, not Chinese.” The fact is, China has a huge wine industry of its own and, given the country’s vast expanse, has growing conditions to suit every varietal.Huge efforts have gone into developing the now troubled US market. “We hope we will eventually be repaid for the effort New Zealand wine producers have made in entering the market,” says Judy. “So far much has been spent by many of us for little return.” The currency has been cruel. Neudorf started selling product into the US when the Kiwi dollar bought US$0.49. It has since been as high as US$0.86, literally doubling the price of Neudorf products.
However all is not lost. Neudorf is a keen member of Complexity, an NZTE initiative aimed at having one New Zealand red label and one white label on the wine list of every ‘White Linen’ restaurant in the US.
Export lessons
Judy is clear on the most important export lessons learnt. “Be wary of distributors who come knocking on your door with big promises. You may well find that your product ends up sitting in a warehouse, destroying your cashflow. You need the right partnerships in place. You need to work with people who share the same desires. There’s a lot of trust in this game and for us that needs to be grown
over time.
“I am happy to say that we would have pleasure inviting any of our export partners to sit at our family dining table.”Vitally important to Neudorf is the positioning of its product. “Right now everyone is a deal junky. They want more for less. It has taken a lot of effort to remain firm on the fact that we provide a premium product at a price that reflects that. It’s easy to go down in price but very difficult to come back up. So you have to be absolutely clear in your own mind that you are going to maintain your positioning and stick to it,” says Judy.Tim has some sound advice too. “Collaboration is far better than doing it alone. The New Zealand wine industry has a long history of cooperation between producers and our involvement with the ‘Family of 12’ means we share the load even further. It’s just not feasible for us to visit all our markets and having 12 different wines on a show stand is far more interesting than just one.” Collaboration also helps reduce the pressure on their time and the size of their carbon footprint, he says.When asked what’s great about doing international business, Judy smiles. “As a tourist you live in a parallel universe enjoying a brief glimpse of what’s on offer. With our agents by our sides we enjoy a very local experience. On a recent trip to Tokyo we were taken down a little back alley to a tiny restaurant with four top chefs and seating for eight customers. It is where wealthy local business people go for an expensive glass of wine and something to eat. “The food was sensational. We felt privileged to have been given that experience.”It may all sound glamorous, but Tim and Judy remember only too well the hard work and toil that got them to where they are today. In the beautiful surrounds of their vineyard they grow the family business with passion. Their eyes are now firmly set on Germany as a growing destination for their wine.
Colin Bass is a Nelson-based freelance writer. Email
colin.bizlab@gmail.com Publishing Information
Magazine Issue
Exporter Nov/Dec 2011 Issue 21
